Overdrafts

Massachusetts Democrat Elizabeth Warren has called Jamie Dimon the "star of the overdraft show" because of the billions of dollars JPMorgan Chase has made from those banking fees. Now she’s telling Dimon and two of his fellow Wall Street chief executives to stop the show.

Citizens' overdraft break, Warren's digital-dollar push and more in banking news this week.

Not all reforms are created equal. Only those truly taking a consumer-first approach — such as curtailing fees and allowing for grace periods — will see lasting benefits in customer loyalty, writes the acting comptroller of the currency.

The Gulfport, Mississippi, bank is joining a number of large and regional banks pledging to reduce or eliminate the charges.

Buffalo, New York-based M&T is the latest bank to announce changes that will save customers money but also reduce service-fee revenue.

Toronto-Dominion Bank’s U.S. retail banking unit is eliminating charges for overdrafts of $50 or less, joining a parade of lenders revamping their fees amid criticism from politicians, regulators and consumer advocates.

The North Carolina company will also eliminate nonsufficient-funds fees as it aims to keep pace with larger rivals, including Bank of America, that have revised their overdraft policies.

Challenger banks like Chime and Dave have been helping customers avoid overdraft fees for years. As traditional banks start to do the same, the fintechs say they still offer consumers a better deal.

Banks that help customers avoid missing important payments are providing a valuable service for which they should be compensated. Though some banks use deceptive practices, customers are willing to pay for a transparent service.

Diane Morais, the bank's consumer and commercial banking president, writes that eliminating overdrafts has had little impact on the bottom line, and she encourages more banks to do the same.

Overdraft fees are criticized as unfair penalties for lower-income customers, but they are often better for consumers than getting purchases rejected.

As PNC's head of retail banking, Karen Larrimer oversaw the development of a new service that alerts customers when account balances are in danger of falling below zero.

Consumer advocates have long wanted to restrict banks' ability to collect overdraft fees. The Empire State's new law represents a small but consequential breakthrough as they push for nationwide reform.

Signed Thursday by Gov. Andrew Cuomo, the new law requires state-chartered banks to pay checks in the order they are received or from smallest to largest. The bill comes as banks nationally are revamping their overdraft policies.

The billionaire entrepreneur, Dallas Mavericks owner and "Shark Tank" co-host has always been outspoken. In a recent interview, he shared his thoughts on the shortcomings of the Paycheck Protection Program, the problem with bank consolidation and the future of cryptocurrency.

Democratic proposals to offer free accounts, restrict overdraft fees and cap interest rates have zero chance of passage. But analysts say lawmakers’ push for products that help consumers is influencing some banks’ decisions to institute reforms on their own.

Community banks, which rely more on the charges than their larger counterparts do, were instrumental in staving off new regulation during the Obama era. But much has changed since Democrats last held power in Washington.

The bank is planning to make product changes and roll out new digital tools that will allow customers to avoid the charges, according to CEO Kevin Blair.

Widely perceived as the architect of the Consumer Financial Protection Bureau, Massachusetts Sen. Elizabeth Warren used the occasion of the agency's 10th anniversary to call for more robust oversight of cryptocurrency and banks' overdraft practices.

PNC, Regions and TD are among the banks that have taken steps to reduce their reliance on charges that disproportionately hit consumers living paycheck to paycheck. The changes come at a time when the Biden administration is expected to take a tougher stance on overdrafts.